2 March 2021

1) The electronics giant Best Buy, has laid off 5,000 full time staff in a move the electronic retailer says was caused by changing consumer patterns because of the coronavirus, and the result of online sales growth in the Amazon race. Driven by the pandemic, their online sales has grown by almost 90 percent in the fourth quarter compared with the previous year. With many Americans stuck at home, there has been a surge in demand for items ranging from computers, gaming consoles to kitchen appliances. But the retailer said that owing to a spike in online sales, which have more than doubled so far in 2021 compared with the same time last year, the retailer needs fewer full-time staff and so plans to add 2,000 part-time workers to their staff.

2) Newport News Shipbuilding, the largest industrial employer in Virginia, has announced the layoffs for 314 employees. In addition, they are moving about 120 managers to lower-level positions. These changes are necessary cost controls to help ensure the shipyard’s future and the afford ability of the ships it builds, while also reducing the number of management layers. The Newport News Shipbuilding company designs, builds and refuels nuclear-powered aircraft carriers and designs and builds nuclear-powered submarines, while employing roughly 26,000 workers.

3) The badly mauled U.S. shale industry is finding a resurgence in one of the most unlikely places . . . private operators that most investors have never heard of. For instance, the case of little known and closely held DoublePoint Energy. It is now running more rigs in the Permian Basin than the giant Chevron Corp. The family owned Mewbourne Oil Co. has about the same number of rigs as Exxon Mobil Corp does. Once minor players, private drillers hold half the horizontal rig count as of December. It’s the first time in the modern shale era that they have risen to the level of the supermajors. This is the result from the big guys starting to show restraint. They’ve dialed back drilling after the pandemic sent oil prices into collapse. Now that the market is on the rise again, the majors and publicly-traded counterparts are mostly sticking to the mantra of discipline, all but ending shale’s decade-long assault on OPEC for market share. But if private drillers keep expanding at their current pace, it could eventually mean that U.S. production ends up on the higher end of analyst forecasts. And that, of course, could weigh on prices. Oil’s dizzying collapse last year is still fresh in the minds of many, and shareholders are quick to punish the producers they think are getting too aggressive.

4) Stock market closings for – 1 MAR 21:

Dow 31,535.51 up by 603.14
Nasdaq 13,588.83 up by 396.48
S&P 500 3,901.82 up by 90.67

10 Year Yield: down at 1.45%

Oil: down at $60.34

18 December 2020

1) American drivers are facing the highest gasoline prices in two months, a result of the rising cost of crude oil used to make the gas. Presently, retail gasoline prices average $2.19 a gallon, up about 5 cents so far this month. Benchmark futures in the U.S. are the most expensive in months, following a rally, fueled in part by optimism around the impending circulation of Covid-19 vaccines, with the price of oil possibly rising further, and so pushing up gas prices. The crude oil needed to produce gasoline is climbing because of availability of the vaccination and anticipation that distribution will be more widely available in 2021.

2) Rep. Rashida Tlaib (D. Mich.) has proposed that the U.S. funding for another round of $1,200 stimulus checks for Americans can be had by reversing President Trump’s $1.5 trillion tax cuts passed in 2017. A point of contention in the negotiations has been another round of stimulus checks. The bipartisan $908 billion dollar proposal unveiled on Dec. 9 and then split into two parts, but did not include stimulus payments. Tlaib has criticized Amazon’s CEO Jeff Bezos and wants him and other billionaire CEOs to pay more in taxes by reversing Trump’s signature tax cuts. Amazon paid no U.S. federal income taxes in 2017 and 2018 despite incomes of $3.03 billion and $10.07 billion dollars.

3) The U.S. dollar fell sharply relative to other major currencies, spurred by the Federal Reserve’s reassurance that it won’t be reducing its bond purchases, which is a green light to sell American currency. The Fed has vowed not to change its policy even if the outlook for the U.S. economy brightens as is now expected. The dollar weakening also comes from rising expectations that Washington lawmakers will finally agree on an economic rescue package that’s seen as necessary to shore up a sagging recovery. A falling dollar is typically seen as positive for American and global equities as well as the world economy. Other central banks are also employing extraordinary measures aimed at supporting their economies. And while a weaker dollar is viewed generally as positive for the U.S. and the global economy, it’s been a source of consternation for some rivals, including the European Central Bank.

4) Stock market closings for – 17 DEC 20:
Dow 30,303.37 148.83 up by 0.49%
Nasdaq 12,764.74 106.56 up by 0.84%
S&P 500 3,722.48 21.31 up by 0.58%
10 Year Yield: up at 0.93%
Oil: up at $48.40

UBER SELLS ITS SELF-DRIVING UNIT TO AURORA….

By: Economic & Finance Report

Technology ride hailing company Uber has sold off its self-driving unit (ATG) to Aurora. Aurora is backed by investors such as Amazon. The sale is an all stock sale, which will make Aurora worth around $10 billion dollars.

ATG (Uber) will be worth around $4 billion dollars from the sale. Collectively ATG and Aurora will have a work force of over 3,000 employees worldwide. Uber sold ATG in order to focus on their core business models and focus on generating profits, which the tech giant has yet to achieve. -SB

1 December 2020

1) Amazon’s cloud-computing unit, Amazon Web Services, suffered an outage, for such services as Adobe and Roku, who rely on Amazon for their websites, while major clients like Apple and Slack appeared to be unaffected. Amazon status page said it was experiencing problems with Kinesis, its service that processes large streams of data, causing increased error rates for a number of websites. Other services affected are Amazon’s smart security subsidiary Ring, software maker Autodesk, the lending company Affirm, Target’s Shipt delivery service and the subway status site operated by New York City’s Metropolitan Transportation Authority.

2) Elon Musk says the Tesla semi truck could go 621 miles on a battery charge, while paying a small weight penalty. Production is due to start this next year. Driven by four electric motors, one for each wheel, the same used on the Model 3 truck, and also uses the regenerative braking that gives quasi-infinite brake life. Tesla claims the truck can go 400 miles on a 30-minute charge using a Megacharger. Musk further claims that from day one a conventional diesel powered truck is 20% more expensive than a Tesla. One main problem is the size and weight of a battery pack to go those distances, so that means a 1-ton penalty compared to diesels. Trucks in the U.S. have a total weight limit of 40 metric tons or 80,000 pounds including their load. Regulations allows 11 hours of driving a day during a 14-hour window, so if a truck averaged 50 mph over that time, it would move 550 miles in a day. For 60 mph it would be 660.

3) The Philippines’ defense secretary has warned that increasing tensions in the South China Sea between the United States and China could easily spill over into war. If a shooting war happens, the Philippines will be involved whether she likes it or not. The crux of the threat is a confrontation of the U.S. and its allies against China for the South China Sea. An example is a Chinese destroyer recently coming threateningly close to an American warship who was conducting a ‘freedom of navigation’ patrol in the South China Sea. Also, China continues its threatening actions against Taiwan by staging amphibious landing maneuvers for invasions of islands like Taiwan.

4) Stock market closings for – 30 NOV 20:
Dow 29,638.64 down by 271.73
Nasdaq 12,198.74 down by 7.11
S&P 500 3,621.63 down by 16.72
10 Year Yield: unchanged at 0.84%
Oil: up at $45.14

20 November 2020

1) The pharmaceutical company Moderna Inc. has announced its experimental coronavirus vaccine is 94.5% effective against Covid-19, the second vaccine to hit a key milestone in U.S. testing. The 30,000-subject trial, which is still underway, indicates it is effective at preventing disease that causes symptoms, while also showing signs of being safe. Moderna said it plans to ask federal health authorities to clear the vaccine by early December, and if approved, could go into distribution that month, making it one of the first Covid-19 vaccines to go into distribution in the U.S., where reported coronavirus cases and hospitalizations are surging. Earlier this month two other companies, Pfizer Inc. and BioNTech SE, said their experimental Covid-19 vaccine is more than 90% effective at protecting people from the virus in a large clinical trial.

2) American retail sales rose at a slower-than-expected pace last month, as spending slowed amid steady increases in weekly applications for unemployment benefits as the pandemic continues to accelerate. Retail sales for the month of October rose 0.3% to $553.3 billion, less than the forecasted 0.5% advance. Amazon, the online retail giant, is considered to be nearing its peak retail expansion in selling and delivering hard goods. Their problem is there’s really not much left to sell except maybe automobiles.

3) The spiraling COVID-19 crisis will confront president elect Joe Biden starting on day-one. But so far, there’s no indication he has any real plan and how he will get it done. He has vowed to enact a swift and aggressive national approach to combating COVID-19 with a federal mask mandate and impose similar restrictions at a local level. He wants to expanding testing and contact tracing efforts and use a more evidence-based approach in issuing guidance. But his success will partly hinge on the daunting task of controlling a spiraling pandemic that has constrained the country for nearly a year, and then repairing the economic damage it has wrought.

4) Stock market closings for – 19 NOV 20:

Dow 29,483.23 up by 44.81
Nasdaq 11,904.71 up by 103.11
S&P 500 3,581.87 up by 14.08

10 Year Yield: down at 0.85%

Oil: down at $41.58

12 November 2020

1) Biden said he’ll forgive $10,000 in student debt for all borrowers. Will it actually happen? During his campaign, Biden advocated forgiving a large portion of outstanding student loan debt. Now that Biden is the President-elect, the 42 million Americans with education loans may be wondering, will it really happen? Biden’s proposal is a scaled-down version of plans that his rivals to the left in the Democratic primary campaigned on. Sen. Elizabeth Warren, wants to cancel up to $50,000 in student debt for individuals with household incomes under $100,000, while Sen. Bernie Sanders, said he’d erase all of the country’s outstanding education debt.

2) The European Union will impose tariffs on $4 billion dollars of U.S. goods starting Tuesday. This is a tit-for-tat escalation of a transatlantic fight over illegal aid to aircraft manufacturers Boeing Co. and Airbus. The EU tariffs will be on various Boeing models of airliners with a 15% duty, as well as other goods ranging from spirits and nuts to tractors and video games, which will be subject to a 25% levy. The move comes at an awkward moment for the EU, which is contending with a surge of Covid-19 cases and its worsening recession. For the last 13 months, the EU has faced U.S. tariffs on $7.5 billion dollars of European goods after Washington won a WTO (World Trade Organization) case against market-distorting aid. In a parallel lawsuit, the EU received final WTO permission to hit $4 billion dollars of American products with duties because of unfair subsidies to Boeing.

3) EU (European Union) regulators announced antitrust charges against Amazon. The European Commission considers Amazon’s collection of non-public data on its platform is then used to benefit its own retail business because sales of third-party retailers is then used to launch Amazon’s own products and undercut its competition. This complaint is one of the most common charges against Amazon as an anti-competitive outfit. About 2.3 million third-party sellers do business on the Amazon marketplace. The EU also has a second formal investigation which has officially been opened.

4) Stock market closings for – 11 NOV 20:

Dow 29,397.63 down by 23.29
Nasdaq 11,786.43 up by 232.58
S&P 500 3,572.66 up by 27.13

10 Year Yield: down at 0.96%

Oil: down at$41.62

23 September 2020

1) After Amazon’s Prime Day was postponed by the virus in July, it was tentatively reset for the fourth quarter. Amazon didn’t want their Prime Day to overlap with Black Friday, which set an upper limit to the date, so now the company is planning for the 13th and 14th of October. Prime Day is a very big retail day for Amazon, with their 2019 Prime Day grossing about $6 billion dollars in sales.

2) Another round of stimulus still remains on the burner and with the fall elections now closing in, both sides are saying they want a new stimulus bill with a second direct payment to the people. But the bill remains in limbo with no agreement on the details of the bill. The question on everyone’s minds is the direct payment checks to the people and how much they will be. No settlement on that question, but the rumors are this one will be based on each person’s income instead of the single lump sum of last time, with an upper limit of $1,200 per individuals. Only time will tell how much, or even if there is a personal payment, because if not passed before the elections, the possibility of passing will rapidly decrease.

3) The coronavirus has been a big stimulus for e-commerce from the stay at home shopping it stimulated, but surprisingly the home shopping boom has also been a boom for the shipping industry. Those huge ocean going ships stacked high with intermodal containers, their transpacific sea freight shipping rates have been sent to the highest on record, helping the container shipping industry in Asia. Household appliances imports have jumped 51% in August from last year, climbing for a third consecutive month. Shipments of computers, notebooks and other associated electronic gadgets has soared 169%. This increase consumer demand has shipping rates almost triple from this year’s low in March, when the pandemic led to border closures and a near halt in economic activity. With much of the world’s people housebound, the demand for electronic goods and do-it-yourself items has skyrocketed. There is also the coming Christmas holidays and therefore the stocking up in anticipation of sales.

4) Stock market closings for – 22 SEP 20:

Dow 27,288.18 up 140.48
Nasdaq 10,963.64 up 184.84
S&P 500 3,315.57 up 34.51

10 Year Yield: down at 0.66%

Oil: down at $39.55

18 September 2020

1) The batteries in electric cars don’t last forever, so therefore they must be replaced from time to time. That leaves defunct batteries which must be disposed of. One company engaged in the recovery and recycling of electric vehicle batteries, as well as other lithium-ion batteries and e-waste, is Redwood Materials run by former Tesla executive Mr. Staubel. Amazon is investing in Redwood Materials as part of Amazon’s $2 billion dollar Climate Pledge Fund. The retail giant Amazon is a major consumer of batteries including its own growing fleet of electric logistics vehicles. In recycling, the company is already recovering most of the metal, lithium, nickel and cobalt from batteries.
2) Some are calling for publicly owned companies to include ‘climate related risks’, since climate change will have a major effect on a companies’ profits and the value of their assets. Therefore, investors want companies to publish these factors in their annual financial reports in accordance to the guide lines from the International Accounting Standards Board. Accounting standards play a key role in calculation of a company’s profits, solvency and remunerate senior executives. Therefore, this information is relevant when judging a company’s likely prospects.
3) Commercial properties in the Asia-Pacific arena is suffering as investors flee the market. Global investors have reduced their spending on commercial real estate in the Asia Pacific area disproportionately compared with other world areas. The total volume of commercial property acquisitions, such as office, retail and hotels, is about 65% of levels in the last two years. The shift is due in part from the Convid-19 crisis. Another fear is the increasing troubles from China across the realm, as China strives to dominate the world by 2050.
4) Stock market closings for – 17 SEP 20:
Dow 27,901.98 down 130.40
Nasdaq 10,910.28 down 140.19
S&P 500 3,357.01 down 28.48
10 Year Yield: down at 0.68%
Oil: up at $40.96

15 September 2020

1) The old, almost extinct vinyl record album technology for music has surpassed the newer high technology CD music media this year, by selling $129.9 million compared to $232.1 million dollars for vinyl records. This is the first time vinyl has outsold CDs since the 1980’s. About 8.8 million records were sold with 10.2 million CDs, so number wise CD’s are still ahead. Overall, the music industry now is center on digital downloads, digital subscription and streaming services such as Spotify, Apple Music and YouTube with revenues up 12% overall. The recorded music for the first six months of 2020 was $5.6 billion dollars so combined vinyl and CD’s are just a small fraction of the total business.

2) Amazon is hiring again expecting to fill 100,000 part time and full time openings across the U.S. and Canada. This is in addition to 33,000 technology and corporate jobs announced just a week ago, many paying six figure salaries. The 100,000 labor jobs pay at least $15 an hour with a $1,000 sign up bonuses in some cities. Amazon is opening 100 new buildings this month because of the pandemic fueled sales surge with increase home delivery, as shopping habits shift to e-commerce. Market value for Amazon is now at $1.6 trillion dollars and continues climbing.

3) Oil giant BP (British Petroleum) says the demand for oil may have peaked last year, that global market for crude oil might never recover from the coronavirus pandemic. The company considers there are three scenarios for energy demand, all of which forecast a decline in demand for oil over the next thirty years. 1) ‘Business as usual’ oil demand increases slightly after the pandemic crisis passes, then plateaus around 2025 finally it declines after 2030. 2) Governments take more aggressive steps to curb carbon emissions, 3) there are significant shifts in societal behavior, both leading to a decline in oil demand. All point to a shift in the world economic system with a significant decline in growth for many countries.

4) Stock market closings for – 14 SEP 20:

Dow 27,993.33 up 327.69
Nasdaq 11,056.65 up 203.11
S&P 500 3,383.54 up 42.57

10 Year Yield: unchanged at 0.67%

Oil: down at $37.38

14 September 2020

1) With 13 million Americans unemployed and their unemployment benefits running out, many will have only seasonal jobs to turn to. But with such wide spread unemployment, getting hired for seasonal work wont be easy. With the coming holidays, seasonal jobs traditionally mushroom with major companies already hosting hiring events to fulfill their temporary ranks. Companies like Michael’s will hire over 16,000 temporary people, with UPS expecting to hire over 100,000 for holiday package delivery. Retailers doing e-commerce, such as Amazon or Walmart are expected to need many seasonal workers and therefore are good places for job seekers to apply.

2) Fears are growing that the coronavirus crisis could cause a double dip recession, that the recession could end up looking like a roller coaster of ups and downs. The upsurge in virus cases is eroding consumer confidence and leading to renewed limits on certain businesses. Economic recovery can bloom then fade away only to repeat again. Some economic factors point to a recovery, yet others point downwards, with the picture further complicated by the ‘what ifs’ of the coronavirus and just how it will play out, where a second wave of the virus could be just as economically disruptive as the first one, maybe even more so. Additionally, a significant portion of the economy has been destroyed. Half the businesses in America are small businesses and at the start of the crisis, about half of those had cash reserves of just fifteen days or less . . . meaning by now they have gone bust! No one knows what the repercussion from such massive losses of business will ultimately have on the economy in general.

3) Mechanical breakdown insurance, which isn’t an extended warranty, but rather is insurance that pays for mechanical auto repairs of a car’s power train, much as accident insurance pays for the repair of body damage. It will have some amount for a deductible, then pays the remainder of a mechanic’s bill for repair, both labor and parts. Usually, any mechanic can be used. Most major insurance companies who offer auto insurance will also offer breakdown insurance too. Prices range from $20 to $100 a year.

4) Stock market closings for – 11 SEP 20:

Dow 27,665.64 up 131.06
Nasdaq 10,853.54 down 66.05
S&P 500 3,340.97 up 1.78

10 Year Yield: down at 0.67%

Oil: up at $37.39